Moderated by Rick Badie
Many Georgia voters probably know about Amendment One, the high-profile ballot question which, if approved Nov. 6, gives the state the power to overrule local school boards and to approve and fund charter schools. But are you aware of Amendment Two, which asks us to give the state the option to execute long-term leases for government offices? Today, we explore the issue.
Long-term leases make sense for state
By Casey Cagle
On Nov. 6, Georgia citizens will consider how to vote for candidates from president of the United States down to city leaders. In the midst of all we hear about candidates, some Georgians may not be aware that they will find two constitutional amendments on the ballot. Amendment Two will allow the state to enter into multi-year leases and save taxpayers millions over the next 10 years.
When the public thinks about government spending, several big-ticket items, such as education, transportation and public health, come to mind. However, there are many routine budget items, like the leasing of office space for government workers, which add up quickly. In this economy, every penny counts. Should Amendment Two be approved, taxpayers will realize significant savings on leased office space.
If we can keep government workers in existing buildings for lower rental rates, it will be more cost-effective than constructing and maintaining new buildings. Georgia taxpayers are forced to pay rates far higher than other “market” renters because of an antiquated law that prohibits the state from signing leases for more than one year. If Amendment Two is approved, the state will have the option to execute long-term leases for government offices rather than being forced into expensive one-year leases.
This will allow Georgia to reap the same savings enjoyed by private businesses. It is common industry practice for landlords to allow much lower rates in long-term leases. This is why a five-year lease might cost $25 a square foot, but a one-year lease might cost $40 a square foot.
The state currently stays in leased office space for an average of 10.7 years. Passing this amendment will not extend occupancy. It will simply lower the amount paid for leased space already in use. This will help keep real estate costs lower and save taxpayer dollars.
We do this in our own lives. Consider how people manage their mortgages. With today’s low interest rates, many Georgians are refinancing and saving hundreds on house payments. They live in the same house, with less cost. This is the same type of cost savings that would take place in Georgia if we pass the multi-year lease amendment.
A conservative estimate prepared by the State Properties Commission estimates more than $66 million in savings will result over 10 years. What could we do with $66 million? We could pay the average salaries for more than 1,300 teachers or police officers.
Georgia and Missouri are the only two states with an AAA bond rating that require single-year leases. All other AAA bond-rated states have been using multi-year leases for a long time, with no ill effects. Let’s make sure Georgia does not lag behind the nation in finding ways to save taxpayer dollars.
Voting yes for Amendment Two simply makes sense. State leaders from across the political spectrum agree; this bill passed with near-unanimous support in the General Assembly. It is an investment in Georgia’s future.
Casey Cagle is lieutenant governor of Georgia.
Ballot words seek to sway, not inform
By David Wilkerson
Voters are being asked to change Georgia’s Constitution by agreeing to two amendments. Amendment One, which deals with state-controlled charter schools, has gained the most attention. Amendment Two, which deals with the state’s ability to enter into long-term building leases, has gathered less attention.
Changing our constitution should not be taken lightly. Voters should be given full disclosure on what officials are trying to accomplish. Too often, ballot questions are phrased to sway and not inform voters. Amendments One and Two are no different.
The following is language from Senate Resolution 84, which created Amendment Two: “The General Assembly may by general law authorize the State Properties Commission, the Board of Regents of the University System of Georgia, and the Georgia Department of Labor to enter into rental agreements for the possession and use of real property without obligating present funds for the full amount of obligation the state may bear under the full term of any such rental agreement. Any such agreement shall provide for the termination of the agreement in the event of insufficient funds.”
In English, that means the state wants to sign a long-term rental agreement without having the money. So why is there no mention of funding? The ballot question states: “Shall the Constitution of Georgia be amended so as to provide for a reduction in the state’s operating costs by allowing the General Assembly to authorize certain state agencies to enter into multi-year rental agreements?”
The General Assembly is now required to set aside the full amount to cover the cost of leases when preparing the annual budget. This limits the ability to sign a lease beyond one year. If the state signs a long-term contract, the money needs to be available now for the full amount. If Amendment Two is approved, the state could enter into leases over a longer term without having the funds on hand.
Businesses often enter into long-term leases to obtain better rates. Those transactions are typically done without the political pressure we see at the Capitol. While the state could save money with multi-year contracts, this is not guaranteed. The state could enter into a contract that costs more. Some voters are worried the change would allow politicians to reward friends with contracts that are cost-prohibitive to break with rates higher than the fair market price. Other voters believe a one-year lease may be too short, but allowing 20-year leases is too long. Why not 10 years? Some suggested the change is being made to allow the state to sign long-term leases on new for-profit charter schools that would be created if Amendment One passes.
I support efforts to save the state money. Longer-term leases may do that. However, I believe politicians owe it to the citizens to state clearly and accurately our intent when we place a question on the ballot. While not as blatant as Amendment One, both are examples of ballot questions loaded with opinion and why Georgia’s process for amending the constitution needs to be changed.
State Rep. David Wilkerson, D-Austell, represents District 33.